Brand collaborations are hot, and Facebook wants to do some matchmaking of its own.
Facebook is testing a new ad format that features multiple advertisers in one unit, bundling dynamic ad campaigns from two different companies in a side-by-side version of Facebook’s Collections ads. Cameron Mills, who works in growth at e-commerce company Brandless, flagged the new ad to Digiday in this screenshot:
A Facebook spokesperson told Digiday that the format is a small test that involves advertisers who have agreed to participate. The advertisers in the test are all e-commerce and retail businesses. During the test, the ads are only appearing in the U.S., U.K. and Canada.
“We are conducting a small test that groups product recommendations from different advertisers into a single experience. We will evaluate if it creates value for people and businesses before deciding whether to expand it,” Mary Haile, Facebook’s product marketing manager, emailed.
For media buyers with retail clients, the format is appealing especially if it’s cheaper in comparison to other ads in Facebook’s News Feed. Indeed, Facebook’s traditional ad units have gotten more expensive over the years and driven brands to look into still-new Facebook Stories, Facebook-owned Instagram and Snapchat. But despite the prices increases, brands, especially direct-to-consumer startups, have credited Facebook ads to their rise.
“If the CPM prices are cheaper than the traditional ads, this could be a great solution to drive cheaper impressions as well as give Facebook more ad inventory space,” said Troy Osinoff, co-founder of digital agency Juice.
One thing the retailers will need to give up: control. In the test, Facebook doesn’t let brands to dictate the other brands they appear with.
The Facebook spokesperson said the company is still deciding on the pricing model — if the unit is ever officially released. It’s questionable whether the brand featured second in the ad unit would be charged less in the auction. During the test, the participating advertisers are not being charged and are simply receiving free impressions if Facebook users see the ad and even if they choose to engage with it, the spokesperson said.
A co-branded unit on Facebook presents concerns of potentially driving sales to a competitor, buyers said. For instance, the screenshot above features Revolve and Bandier, two women’s clothing companies. Revolve confirmed to Digiday they are part of the “exclusive test” that they described as being “funded by Facebook.” Bandier did not respond to a request for comment.
“Given that it’s a new ad format that users will not be used to, not having control over who is being advertised next to our client’s brand is a bit concerning. It will create the idea of an affiliation in the user’s mind that is completely out of their control,” Osinoff said.
Still, Osinoff said he’s interested in testing the format — if given the opportunity — due to the success his agency has had with Facebook’s Collection ads for its retail clients. Osinoff and Mills of Brandless both compared the new unit to Google Shopping, the service that allows online shoppers to search for products and compare prices.
“It’s very different from Facebook’s ad units today. Looks and sounds like Facebook’s take on Google shopping ads,” Mills said.